Background

Long rumored to be building a Facebook mobile phone, Facebook upset this expectation on April 4th with the announcement of a new mobile application they are calling Home. The app, which will initially be available only for select Android models, adds a slew of new and noteworthy features to the native operating system. New features include the replacement of the phone’s lock-screen with a stream of Facebook News Feed updates, effectively making Facebook content front and center in the user’s mobile experience.   A partner phone, the HTC First, was also announced and will come pre-loaded with the app.

How it Works

Starting on April 12^th, you will be able to download the apps onto select Android devices or purchase the HTC First phone which comes preloaded.  Once Facebook Home is enabled, turning on your phone or pressing the home button brings up a stream of posts from the News Feed.  The “Cover Feed” as Facebook refers to it, turns your entire phone screen into a Facebook News Feed.

Facebook Home displays notifications on your phone for both Facebook as well as other Facebook compatible apps such as Instagram.  It will also enable you to see Facebook chat notifications complete with profile picture even while using other apps.  An app launcher will help you control which apps you’d like to have most accessible.

The HTC First has partnered with Facebook and will have Facebook Home pre-loaded, all you need to do is login to your Facebook account once to make it work.  Currently the phone is exclusive to AT&T and available in the US only, priced at a modest $99.

Resolution POV:

Facebook Home will keep Facebook at the forefront of a user’s mobile experience, likely increasing usage and interaction with the social network for those who download.

Choosing a phone with such a reasonable price point ($99) reduces barrier to adoption. The lower price point and mobile focus may also be a move to drive higher engagement amongst the under 21 set who have started to drift away from Facebook.*

Here are three more key thoughts about the future of Facebook Home:

1)     Advertising – No advertising will appear on the feed at the current time but according to Facebook will be integrated in in the future.  If a user follows a brand or friend on Facebook, they will be able to see organic status updates as part of Facebook Home. These status updates  will show as a full-screen takeover on a user’s mobile device, as part of the new Home feed. As such, for  brands, publishing mobile-friendly content will be more important than ever, as that content will be more visible than ever.

2)     Location – Facebook Home has a potential to become a stronger location-based platform,  giving advertisers an opportunity to target users in real time, sending buzz alerts on their phones as customers pass by a store or engage with other of the phone’s location-based features integrated with Home.

3)     Graph Search – As Facebook Home gets traction with users, we anticipate that Graph Search will see wider adoption and will become a focus for Facebook and advertisers. As Home is essentially a master app that serves as a gateway to other phone features, it pushes traditional search functionality to the background, potentially making way for Graph Search as a primary search tool for mobile users.

 * Information about habits of Facebook users under the age of 21 came from Facebook’s annual 10-K filing with the Securities and Exchange Commission (SEC).

Summary

Facebook’s announcement of Facebook Home introduces both a pseudo operating system (family of apps) as well as a partner phone, the HTC First, which comes pre-loaded.

This will keep Facebook at the forefront of a user’s mobile experience and may increase engagement amongst the younger generation.

No immediate action needs to be taken by marketers as Facebook Home will not feature ads at launch but should be followed closely for future opportunity.

For more information, visit:

http://www.facebook.com/home

The Australian High Court ruled in Google’s favour, putting the pressure on advertisers to marshal other advertisers, not the media owner.

Chief Justice French and Justices Crennan and Kiefel said: “Google did not author the sponsored links; it merely published or displayed, without adoption or endorsement, misleading representations made by advertisers”.

Reception across the industry has been mixed, with many seeing it as a watershed for brands to start activity targeting their competitors’ core brand terms, keywords which normally afford the lowest cost per click (CPC) for the brand and are key to driving efficient sales. The worry is that if Google now relax their trademark regulation and brands are allowed to target their competitors, by entering the auction, the competitors will not only direct traffic elsewhere, but also push up the CPC by the incumbent brand owner – a double hit.

Lost clicks

To cover off the “easy” one first, for me, this is simply a question of how stupid do you think your customers are and do you rate your own product enough that they won’t be tempted away at the very last minute? It’s a little trite, but I view this as the same as a man with a sandwich board stood outside your store or restaurant. Yes, a handful of people will see the ad, change their mind and go elsewhere, but using say, McDonalds, as an example, do people heading into McDonalds, on seeing a man outside with a board really think twice and change their mind and head to Subway down the road? Do people searching on Google really not know the difference between one ad and the next? Is your product so poor that it can instantly be replaced by a competitors’ if they see an ad at as late a stage in the purchase funnel as searching for your own brand?

Looking at Hitwise data from a number of previous instances of competitors starting to bid on clients’ core brand terms, I would suggest this is unlikely. If any, the dip is usually minimal. Added to this, any loss of traffic could potentially be put down to people who may not have converted anyway – I have often seen conversion rates slightly increase when traffic slightly decreased as a result of a competitor entering the auction.

 CPCs

This is a little more difficult. Yes, there is a very real chance that the increase in competitor activity will drive up CPCs on the core brand terms – I have seen this happen on multiple clients who have had competitors enter the auction for a consistent amount of time.  That said, we need to take it with a slight pinch of salt and remember:

• Due to the inherently lower level of relevancy between, say hungryjacks.com.au and mcdonalds.com.au to the keyword [mcdonalds], bidding on competitor’s brand terms is always going to cost the competitor advertiser many times more for the clicks. For the vast majority of advertisers, this will not be efficient in terms of cold, hard conversions so, while they may dip a toe, it is unlikely to last.
• However far they change their rules, Google will still have very strict trademark rules to state that in order for an advertiser to use competitor’s brand term, it must show direct relevancy within the first two pages the ad directs the user to. There is no change to this based on the ruling therefore any competitors who cannot offer this level of onsite relevancy will struggle for relevancy in their ad copy and their Quality Score will suffer and, as above, any short term tests are unlikely to last long.

If there’s a particular type of “competitor” who are likely to cause trouble on the back of the ruling it are affiliates and re-sellers, however, this ruling should not change the rules of engagement in these relationships:

• Affiliates should be given clear rules over what they can and can’t use in copy and which keywords they can bid on.
• Resellers cannot, legally, be contacted over their Google activity but should be monitored and have trademark agreements in place for only the most important partners.
• Account teams should use competitor monitoring tools to monitor activity of both rogue affiliates and competitors, with relevant action taken to remove advertisers who break the rules

What is important to point out is in the UK when the similar ruling was made and Google changed its trademarking rules, it was a two-step process – with the first, the removal of trademark policy on keywords but still maintained on Ad copy, then at a later stage, the total removal of the trademark policy across both searches and ad copy. Introducing that kind of change to the Australian market will take time and we can be prepared for it.

Even when the changes come into action, I don’t foresee a great shift in advertisers’ behaviour with respect to competitor bidding but, it is important for advertisers to:

•  A Brand campaign – If it’s not already part of the strategy, build a brand-protection campaign that clearly directs consumers to your site rather than the competition
• Prepare for the worst – build a plan for how you will manage if competitors swarm onto your brand: forecast what will the change in metrics may look like; will you retaliate (not a good idea) or change your bid strategy? Are you making the most of all of Google’s ad extensions to own as much of the results page as possible?
• Invest in monitoring technology such as Adthena, Adgooroo and the tools available from Google to get the clearest possible picture of what their competitors are doing in the results pages.

As a final point, I think it is also important to mention that as and when the trademarking rules on Google are relaxed in Australia, it does help many retailers – no longer having to go through the lengthy process of requesting white-listing for the products a reseller legitimately stocks, will free up a lot of time on both sets of the retail table.

I would never recommend bidding on a competitors brand as, in general it does nothing other than line the search engines’ pockets with clicks for irrelevant traffic but others certainly will at some point. I’m confident however, so long as account teams are vigilant and have plans in place, there shouldn’t pain can be minimized.

Source: http://www.smh.com.au/technology/technology-news/google-claims-victory-in-accc-court-battle-20130206-2dxi8.html

Perhaps the real stars of Monday night’s ratings showdown are those in the marketing department at Network Seven. With some clever editing (and frequent airing) of their My Kitchen Rules promo spots – in which NSW friends Jessie and Biswa were quickly turned into the channels resident villains – they were able to draw 2.2 million viewers across Australia’s capital cities (and an additional 1.03m throughout regional markets) into last Monday’s episode, with many viewers eager to see the girls get their just desserts.

With their frequent reminders to tune in at “7 O’block”, Nine has long aimed to position The Block as the go-to choice in key programming on air throughout the week. However, one week into 2013’s series, this has not proven to be the case, with Seven’s indomitable MKR the number one program every weeknight against the key buying demos P25-54, P16-39 and GB+CHs.

MKR is the clear front-runner in the ratings war, taking top spot every night. Meanwhile, The Block has been lingering towards the lower end of each night’s top 10 against the majority of demographics. This positioning is likely causing some worry at Nine HQ, where they’ve scheduled a second series to run later in the year. If viewer interest is low in Q1, they have to question if a second series is worthwhile.

For now, it’s possible that The Block will pick up, especially when not airing opposite MKR. Yet it’s almost certain that this installment will not prove to be the ratings juggernaut Nine had hoped for. Year-on-year, the audiences have fallen significantly (down 37% TTL PPL) despite the return of ‘viewer favourites’ in the cast. Given the congestion in the market with MKR & MasterChef Professionals early in the year, the show will need to fight harder for its share of viewers. With the official ratings season now open, Nine will need to make a more concerted effort to attract and maintain viewer loyalty to their Q1 offerings.

We predict The Block All Stars will be a moderately successful program, but will fail to provide the significant boost required for Nine’s plans of dominance this year. Claims of significant improvement this year, in which the 1st quarter programming driven by The Block All Stars was to lead the charge, has left the the industry in doubt and Nine’s programmers concerned. Based on the first week of the show’s ratings, it appears Nine will have their work cut out in achieving their guaranteed 5% audience increase this year.

• Twitter’s ambitions in the Social TV arena signalled by acquisition of TV analytics firm Bluefin Labs.
• Facebook are also on a shopping spree with a rumoured buyout of Atlas, Microsoft’s adserving business.
• Amazon announce launch of virtual currency, Amazon Coins, to buy apps and virtual merchandise sold in games.

• Coles use social media to enter milk pricing debate.
• Australians are moving to 4G in droves as Telstra announce 1.5m devices sold.
• Let’s hope Gerry Harvey doesn’t get his way.

• Zynga, the social gaming behemoth, now has 298m monthly active users worldwide, with a quarter of those playing only on mobile.
• 61% of users have taken a self-imposed Facebook ban in the past.
• iTunes has reached 25 billion song downloads, averaging 15,000 a minute since it launched almost 10 years ago.

• Lego created ‘Brickmented Reality’ to connect with families at Christmas.
• Things were done differently in Don Draper’s day…
• …and one for the ladies – David Beckham’s latest ad for H&M.

Pros

• No longer separating campaigns by desktop/tablet/mobile, saving time and complexity
• Desktop & tablet to be merged, with mobile targeting being given a bid multiplier
• New option to bid up / down by location (proximity bidding)
• No more targeting mobiles by specific device, Google knows whether to send traffic to GPlay or the App Store for app downloads
• Ad group level site links, and (finally) specific site link reporting
• Improved conversion tracking, including (free) call tracking and import of offline sales data (eventually).

Cons

• Potential bid volatility and loss of direct control
• Short term issues on reporting via 3^rd party tools – though we expect our technology partners to get a full brief on how the changes will surface in the API feeds.

And now the long version…

Over the next several months, Google will gradually roll-out a new campaign structure in AdWords that looks to “tear down device-specific silos in digital advertising and better align digital media strategies with user behavior”. This means that advertisers will not have to (or, be able to) create separate campaigns targeting specific devices, which presents both a challenge and an opportunity to advertisers. It will reduce the complexity of an advertiser’s AdWords account by consolidating all device targeting into a single campaign, introduce new bidding controls, and allow for more relevant messaging based on a multitude of variables (time of day, location, device, etc.). Very similar to the hour-of-day ad scheduling option we’ve long-since utilized to cover only supporting store opening times or to push when TV spots are showing, we will now have the function extended to target, for example, a person looking for a place to eat dinner (from 5 – 8 p.m.) within a certain distance of your store locations, and to speak to them with mobile-specific messaging.

Google’s partners and agencies, including OMD, had noted that in many ways, account management was becoming too fractured and complex. While search managers typically like this level of control, it also led to complicated account structures and an approach that didn’t lend itself to thinking holistically about the searcher, but rather the device. This is Google’s first step in trying to encourage advertisers to shift their approach.

In doing so however, they are also removing something that advertisers have grown accustomed to and planned marketing budgets around – the ability to allocate budgets based on device (i.e. desktop, tablets, or mobile).  With this consolidation, Google is taking the key step of beginning to provide visibility into cross-device behavior – showing, for example, that a user who started their search on their phone may have later made a purchase on their desktop computer. This level of visibility has been a major industry challenge and to-date has only been possible in very limited circumstances with additional technology integrations.

By combining data across devices, platforms, and other data sources (such as in-store POS systems), Google is now able to deliver a much more complete picture of how media dollars are being spent, understand performance across channels and devices, and finally make some solid steps forward towards closing the online/offline loop. With this, they have also taken the opportunity to streamline the tools that advertisers use to manage their advertising against these data points. We welcome this push forward from Google towards evolving how paid search is managed.  However this is new territory and as such there are going to be stumbling blocks and differences in opinion as to the best way to proceed.

Our POV:

Benefits

While there are many components to this update, there are several new features we are very excited to introduce to our campaigns:

Consolidated Bid Management/Account Structure

Google will remove the ability to break out campaigns by device type.  This means setting a budget for a mobile-only campaign will unfortunately no longer be possible.  To help users manage the different behavior of various devices, Google is introducing bidding tools to allow advertisers to set multipliers to increase or decrease bids on various devices based on a single max bid.  So, you might set desktop at 100% and mobile at 50% if you want to emphasize desktop, for example. The current understanding is that each campaign will maintain its own device-specific Quality Score so that one advertiser’s strong desktop quality score does not impact another advertiser’s mobile Quality Score for example. Additionally, Google has a component of this called “stacked bidding,” where advertisers can include several layers of bid preferences based on a variety of circumstances such as the one mentioned above.

This is very similar to the time-based “ad-scheduling” we have had available for many years, but is now extended to cover the different devices

More Granular Site Link Management/Reporting

Now that device campaigns will be consolidated, Google is enabling advertisers to create separate sets of site links by device so that an advertiser can include mobile-only links, for example.  As part of this, Google will also report on full performance breakouts down to the individual site link level. Combined, this will allow advertisers to deliver a more relevant site experience when site links show, and allow more effective optimizations to be made. The reporting in particularly is long over-due so will come as a welcome addition to our reporting options.

Situational Bidding and Ad Creation

With the increased visibility gained regarding user behavior across devices and locations, Google now enables advertisers to break out ad copy and set bids based on the user’s situation.  For example, it may be beneficial to show one set of ads to a customer showing geo-specific intent with their query, versus another set to users who appear to be doing comparison shopping for products at home. Or, for instance, a retailer could increase bids on people that are within a close proximity to their store locations who previously searched for products the store carries on their home computer. Again, this functionality had previously been available in Beta-form under the title of “proximity bidding” so it comes as no surprise that it is being rolled up into the new format.

Multiple Conversion Types

The previous iteration of Google’s conversion tag produced simple results – it counted page views on the page it was placed. This is fine for “Thank you” confirmation pages  but gave advertisers limited control over conversion types. Google is now facilitating multiple conversion types through an expanded list that includes more formal recognition of call conversions, as well as adding support for offline conversions, though these will, we assume, to come from 3rd part data integrations.

Cross-Device Conversion Attribution

Google has said that advertisers will finally be able to measure conversion paths that may have spanned multiple devices. This means, for example, that when a user searches for a product in a retail location on their mobile device to compare prices, and later decides to purchase it through a paid search ad when they get home, there will be a thread that ties these two touch points together in the reporting. When viewed in aggregate, this will give a much more complete attribution picture of how users are truly behaving as they go about their day interacting with a variety of devices/channels.

The details on the release and full functionality of this feature are still somewhat in question at this time, so we suspect that this may be more of a long-term enhancement. Clearly it will be game-changing as and when released.

Challenges

While we are, with such a wide-ranging release, excited to see the benefits of a large number of these changes, there are several that we have reservations about based on initially available information.  We anticipate a few challenges that are worth highlighting:

Bid Volatility

We’ve seen that when Google releases major changes regarding how bids are managed or new targeting options, bid behavior tends to fluctuate. We expect to see some variance in average CPCs at the account level — particularly around mobile where Google will be removing its Smart Pricing algorithm that helped keep mobile CPCs low for some time.

It is quite possible that average CPCs will see a net increase as a result of this change.  This bidding by device will be set at the campaign level, which removes a level of control previously taken advantage of by more sophisticated advertisers and potentially further increases CPCs. You can be assured we will be closely monitoring this and teams will take appropriate action, including shifting spend away from Google to other engines (such as Yahoo) if necessary.

Conversion Data Segmentation / Third Party Tools

As a developed team, many of our client accounts have AdWords managed through a 3rd party bid management technology and as such it is possible that some granularity in conversion data at the device level may be lost with the consolidation of campaigns.  Google is making changes to their AdWords API to support this update, and will be working closely with their technology partners to minimize any potential impact or loss of visibility.

Budgeting/Device Control

Many of our clients recognize the importance of mobile and tablet devices and have frequently chosen to support them through initiatives that often include device-specific budgets.  Based on how Google has chosen to consolidate device targeting, this will no longer be an option.  We have provided feedback on the importance of being able to manage device budgets independently, and we will be working closely with our clients on potential solutions for this shortcoming.